Ahhh.... Contracts... Something I actually enjoy talking about. Why? Because it gets on my nerves just how many contracts are written with poor structure, or bad business language. Having wrote about a hundred of these things, I think I get the general gist of things regarding contract writing.
Before I start, in response to a comment, this advice comes from my knowledge of English law, so if you are outside of this jurisdiction and you doubt any of this advice, then don't use it. I have made some changes regarding particular sections, but most remain intact.
You'll be surprised how many contracts lack these... I'm going at a guess of 70% of contracts lack headings, which is really bad business practice. I'm going to reject any contract that lacks this, because I am not going to waste my time trying to find a specific term to prove a point in a contract dispute (in case it ever happens). Putting a title per section is not hard work, it takes 5 seconds to write one, and I'm surprised not many contracts do this.
Another no-brainer, if you are going to write a contract like this for example:
The Company must adhere to the below terms of agreement as written by the Contractor. All Productions must be produced and delivered to in some form to the Contractor. The Company will receive respective royalties until the end of the Product's Lifespan.Who's the Company? Who's the Contractor? What are the Productions? What is the Product? How is "Lifespan" defined?
These are all very important aspects of a contract, without the definitions your contract is likely to be refused.
ADR - Alternative Dispute Resolution
In the UK, there is a thing called the ADR, which is basically a system that involves out-of-court discussions relating to legal disputes, in this order (from lowest to highest):
Some jurisdictions may have different systems.
It is important in a contract to put in some form of ADR, such as negotiation, which makes the contract look more friendly and pleasing to the recipient. This is commonly referred to in the "Termination of Contract" section, close to the end of the contract.
Introductions do not need titles
It is quite obvious where the introduction is going to be, so don't put a title for it - you look like a fool doing that. Here is an example paragraph of an introduction which is commonly used for most contracts:
The Contractor ("[contractor name]") agrees to bind the Company ("[company name]") for the purposes of producing a Product ("[product name]") that requires the Company to produce select Materials for said Product. The Company, by signing at the end of this Contract, agrees to be bound by the terms of this Contract. By producing the Materials, the Company agrees that the Contractor, for the purposes of this Contract, will use said Materials for use in the Product under terms of this Contract.It is important to make clear any drafts of a contract. It is also good practice to write any amendments in an Appendix (after the signatures).
The terms of this Contract may change from time to time, and the Contractor in this instance agrees to send the amended draft to any and all first parties related to this Contract for re-approval.
Referring to Amendments
If you have version 1 to version 27, there is going to be a lot of amendments. All copies of all versions of your contract must remain intact, and any amendments be made in a different document.
By having each copy of different versions of a contract is good legal practice to have.
Unless it is a title, sub-heading, the Introduction, metadata or signatures, you should put numbers for each term to make it easy to read, using proper indents and justifying the text.
Structure and Layout
Some standard form contracts have no boldness in Titles or Headings, and hardly any structure, layout or good presentation. This is the reason why hardly anyone reads a legal document, not alone a lawyer, because it's poorly structured most of the time.
Terms need to be to the point and describe exactly what I CAN and CANNOT do, what rights I reserve and what royalties I will get, end of. Any consequences to these terms should be written at the end of the contract, notably in a "Termination of Contract".
It can be often, particularly in American law, where some terms of legislation are so confusing and make no sense whatsoever. Avoid complex paragraphs and make sure you understand it; because if you can't, neither will the reader.
If you want to be a businessman, you need to know how to read and write a contract, and be able to understand business language, and this is why I feel any and all businesses should be run by Corporate citizens that have a diploma or degree in some form of Business subject, otherwise you end up with idiots writing bad policies and contracts that are poorly written.
You can probably say that to a few companies and they won't understand what this means... If you are going to own a business, just don't get yourself into trouble with badly spelt (not the American English definition) Contracts. That's all I'm going to say.
I hope this serves the legal world well, and thank you anyone for participating (if that's the right word to use).